The AAT has upheld the Commissioner’s decision to disallow a claim for car and travel expenses.
The taxpayer was a Philippines national who came to Australia with his family on a Religious Worker Visa sub class 428. He was employed by a church in Queensland as an associate pastor, but he also worked as a cleaner to supplement his earnings. The church gave him a $4,000 car allowance. In December 2010 he and his family returned to the Philippines shortly before his visa was due to expire, but they returned to Australia a month or so later on a new visa.
In his tax return for the 2010-11 income year, the taxpayer claimed deductions for car expenses and also for travel expenses in relation to the visit to the Philippines. He also claimed the education expenses tax offset. The taxpayer relied on his brother-in-law, a retired tax agent, for help in completing his tax return.
The AAT confirmed the Commissioner’s decision to disallow all those claims for the following reasons:
- consideration should only be given to car expenses that exceeded the $4,000 car allowance, but the total claimed was less than the amount of the allowance;
- the Philippines travel expenses had no connection with the taxpayer’s income as an associate pastor; and
- the taxpayer did not qualify for the education expenses offset as he was not an Australian resident as defined in s 7(2) of the Social Security Act 1991.
The AAT also upheld the shortfall penalty imposed by the Commissioner, on the basis the taxpayer had failed to take reasonable care to comply with the taxation laws.
(AAT Case [2014] AATA 186, Re Yerro and FCT, AAT, Kenny SM, Ref No 2013/2613, 4 April 2014.)
[LTN 67, 8/4/14]